Working with small-balance commercial mortgage lenders is a great opportunity for brokers to increase their business and income. However, in order to succeed to succeed in this niche, it’s important to develop your skills as a storyteller. Because non-conforming lenders aren’t subject to the same regulations as banks and other traditional lending sources, your borrowers’ stories are important to them when underwriting a deal.
Here’s what you’ll need to tell your commercial mortgage borrower’s story:
A detailed loan submission summary
Before you submit a small-balance commercial mortgage request, it’s important for you to know your borrower, their business and how they’re planning to use the funds. A great way to get this information across to your lender is through a well-written loan submission summary. Highlight information about your borrower such as their experience as a business owner or an investor, their financial history and how the use of proceeds will help them and their business.
An understanding of the borrower’s credit history
You’ll touch on this in the loan submission summary, but it’s crucial to have a good understanding of your borrower’s current credit scores as well as their credit history. Make sure you know about any past challenges they’ve faced and be prepared to discuss these will your lender.
Information about the commercial property
Whether your borrower is refinancing a property they currently own or purchasing a new building, you need to be able to provide your lender with some basic facts about the property. Where is it located? How large is it? What will your borrower use it for? Has it been used for other types of businesses in the past? These are all questions you should be able to answer.
An understanding of your borrower’s business
When you submit a small-balance commercial mortgage request, you should know as much as possible about your borrower and their business. Whether they’re an owner operating out of their property or an investor, you should be able to explain their business to the lender in detail.
When working with non-conforming lenders, it’s important for brokers to learn about their borrowers and to be able to tell their stories. Understanding what your borrower is looking to accomplish, any past challenges they’ve overcome, and how their business is operating now will allow you to answer your lenders’ questions in a way that makes the lending process easier. By providing the above information early on and in detail, you’ll close more deals more quickly and earn more.